Southern Pacific Resource Corp · OTC:STPJF
Southern Pacific Resource — Investor Presentation (March 2012)
30 slides from Southern Pacific Resource's investor presentation, March 2012
Slide 1: Corporate Presentation March 2012
CORPORATE PRESENTATION MARCH 2012
Slide 2: Reader's Advisory
Reader's Advisory Forward-looking Statements: References to "contingent resources" or "resources" in this presentation do not constitute, and should be distinguished All statements other than statements of historical fact may be forward-looking statements. These statements relate to from, references
Slide 3: The Southern Pacific Strategy
The Southern Pacific Strategy FOCUSED: We develop and produce bitumen and heavy oil using horizontal wells and steam. INDEPENDENT: We control and operate 90% of our lands, allowing us to develop at a pace that fits our objectives. DEMONSTRATED EXECUTION: We have solid operations and constructi
Slide 4: STP Overview
STP Overview Trading symbol TSX:STP Shares outstanding - basic 340 million Shares outstanding - fully diluted 364 million Average daily trading volume (Last 6 mo avg.) 1.5 million Market capitalization (Jan. 31, 2012) $560 million Working capital (Dec. 31 2011) $89 million Long-term debt (Dec. 31, 2
Slide 5: Strategic Land Position
Strategic Land Position • Alberta: 436 sections (242,176 net acres) of oil sands leases with 87% average working interest • Saskatchewan: 12 month average of ~4,300 barrels per day (bbl/d) of 100% working interest heavy oil 5
Slide 6: STP-Senlac Thermal Project
STP-Senlac Thermal Project (January 2012 on stream) • 4,000 - 5,000 bbl/d for the next 10 -15 years • Best in class SOR of 2.0 – 2.2 • Experienced operations personnel • Phase J, new 3 well pad: on production in January 2012 6 Refer to slide 2 for cautionary statements about forward-looking informat
Slide 7: STP-Senlac: Historical Production
STP-Senlac: Historical Production 7,000 STP Operates Senlac 6,000 Quarterly Average Production Rate (bbl/d) 5,000 Optimal plant throughput range 4,000 3,000 2,000 1,000 0 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 PHASE A B C D E F G H J K - AA • STP ac
Slide 8: STP-McKay Thermal Project
STP-McKay Thermal Project • 45 km NW Ft. McMurray • 10.5 section project area • 100% STP working interest • Regulatory approvals in place • Phase 1 construction fully STP Lands underway Suncor MacKay SAGD Project • Phase 1 Design: (Analog) • 12,000 bbl/d oil • 33,600 bbl/d steam STP-McKay Thermal Pr
Slide 9: STP-McKay Phase 1: Project Overview
STP-McKay Phase 1: Project Overview 12 SAGD well pairs successfully drilled through high quality Phase 2 - Future reservoir Central Plant Facility location 29 km all season access road & 14 km Phase 1 - Central Plant natural gas pipeline - Process Facility complete 9
Slide 10: STP-McKay Phase 1: Overview Plan
STP-McKay Phase 1: Overview Plan Construction Camp Clay borrow pits Central Process Facility SAGD Wellpad #2 SAGD Wellpad #1 Operations Camp Photo taken November 2011 10
Slide 11: Module Approach To Construction
Module Approach To Construction • Modules have been built in fabrication shops • Arrive on site with most internal work completed • Set in place, and connections (electrical & mechanical) are made • Minimizes on site welding, insulation, electrical and instrumentation requirements Piperack module In
Slide 12: STP-McKay Staff: Ready for Operations
STP-McKay Staff: Ready for Operations • 42 of 46 full time staff hired for operations • Experience from 12 other thermal projects • Moved to permanent camp facilities and office in January 2012 • Commissioning and “Ready for Operations” preparations underway • Smooth transition from construction to
Slide 13: STP-McKay Phase 1: Construction Update Central Process Facility
STP-McKay Phase 1: Construction Update Central Process Facility (CPF) • Over 4,500 of 5,300 piles have been set • Electrical & instrumentation work has commenced • Largest pieces are now installed on site • Nine 10,000 bbl tanks erected • 100% of piperack modules installed • Steam generator, cogen,
Slide 14: STP-McKay Phase 1: Construction Update Well Pads
STP-McKay Phase 1: Construction Update Well Pads • 12 SAGD well pairs + 1 HZ CSS well successfully drilled and completed • Surface modules will continue delivery and installation through March and April Wellsite modules arriving on site Surface steam and effluent pipelines from CPF to well pads near
Slide 15: STP-McKay Phase 1: Spending Update
STP-McKay Phase 1: Spending Update • Capital forecast reduced $10 million to $440 million • This includes ~ $15 million of Spend breakdown estimate as of Dec. 31, 2011 unbudgeted scope changes (Amounts in Millions) including: – Additional 40,000 bbl dilbit storage tank – Increased water recycle on I
Slide 16: STP-McKay Phase 1: Timeline to Production
STP-McKay Phase 1: Timeline to Production Road Construction ERCB Project Approval Plant & Pad Site SAGD Drilling Facility & Pad Construction Mechanical Completion Commissioning Steam Circulation Current First Oil Jul-10 Oct-10 Dec-10 Apr-11 Jul-11 Oct-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 • First st
Slide 17: Senlac and McKay Phase 1: Production Profile
Senlac and McKay Phase 1: Production Profile • „First Oil‟ for STP-McKay Phase 1 expected in calendar Q3-2012 • Ramp up expected to take ~12 months • 2 week turnaround expected within first 12-18 months of operation • STP production should exceed 10,000 bbl/d of liquids production in 2013 16,000 14,
Slide 18: STP-McKay: Phases 1 and 2 Layout
STP-McKay: Phases 1 and 2 Layout (circa 2014) Well pads Phase 1 Phase 2 Continuous pay fairway • STP-McKay Phase 2 is being designed to add 24,000 bbl/d of bitumen processing capacity, bringing the total to 36,000 bbl/d Refer to slide 2 for cautionary statements about forward-looking information. 18
Slide 19: STP-McKay Phase 2: Construction Strategy
STP-McKay Phase 2: Construction Strategy • Southern Pacific plans to stagger the construction of Phase 2 in two integrated 12,000 bbl/d pieces Phase 2B • Provides maximum Highlighted in red flexibility both operationally and financially • Application for approval was submitted to regulatory authorit
Slide 20: Southern Pacific's Existing Project Growth Plan
Southern Pacific’s Existing Project Growth Plan • Forecast represents real projects that are on production, being constructed or in the application process • First oil for STP-McKay Phase 2 is forecast for 2015 40,000 35,000 30,000 25,000 bbl/d 20,000 15,000 10,000 5,000 0 2012 2017 2022 2027 2032 2
Slide 21: Wabiskaw Bitumen: Additional Resource at McKay
Wabiskaw Bitumen: Additional Resource at McKay Clearwater • Wabiskaw zone lies directly above McMurray over Shale most of McKay Phase 1 and 2 (Caprock) • Approximately 200 mmbbl of BIIP (Bitumen Initially In Place) (management est.) • Recovery mechanism planned: Wabiskaw • Combination of cyclic stea
Slide 22: STP-McKay: Full Bitumen Exploitation Plan
STP-McKay: Full Bitumen Exploitation Plan Conduction and cyclic steam SAGD injector SAGD producer Infill horizontal well 22
Slide 23: STP-McKay: Future Upside
STP-McKay: Future Upside STP-McKay Thermal Potential Phase 3 Expansion area • 100% working interest in Project boundary (environmental background work 59 sections underway) • Will have full-time Phase 1 operations in this area in 2012 • Other operators in area currently in application Phase 2 prepar
Slide 24: STP-Red Earth Thermal Project: Cyclic Steam Stimulation
STP-Red Earth Thermal Project: Cyclic Steam Stimulation (CSS) Pilot Project 6 miles • 135 sections (100% WI) • Existing 1,000 bbl/d thermal project 1,000 bbl/d thermal facility • 105 MMbbl of P50 contingent resource • Pilot project tested in 2011 • Data collected being used to design next series of
Slide 25: STP's Upside: Additional Oil Sands Leases
STP’s Upside: Additional Oil Sands Leases Hangingstone 29 coreholes 2D seismic 66 Sections Anzac 14 coreholes These exploration blocks 2D seismic, ERT represent significant upside 75 Sections potential for future in-situ oil Ells 15 coreholes sands projects 2D seismic 50 Sections Leismer & Kirby 29
Slide 26: Summary of STP's Recent Financing Activities
Summary of STP’s Recent Financing Activities • $ 270.5 million – equity financings – $108.4 million in May 2010 (STP-McKay Phase 1) – $ 52 million in October 2009 (STP-Senlac) – Remaining in 4 offerings during 2006-2007 (Land and Exploration) • $ 173 million – convertible debentures – 6% annual inte
Slide 27: Sources and Uses Forecast
Sources and Uses Forecast (January 2012 to December 2013 – 24 months) (Amounts in MM) STP-McKay Interest & Phase 1 Principle Payments Construction $74 Use of Capital $90 (Total of $221 million) Senlac 2 year Capital STP-McKay STP-McKay $39 Maint. & Pad 103 Phase 2 Prep $11 $7 Corporate Source of Cap
Slide 28: Risked Net Asset Value: Solidifying Assets as the Company Grows
Risked Net Asset Value: Solidifying Assets as the Company Grows Jan. 1 20111 June 30 20111 Nov. 30 20111 NAV NAV NAV Reserves Implied Value MMbbl per barrel Total Proved Reserves2 $254 15% $726 36% $838 120 $6.97 31% Probable Reserves2 $406 24% $383 19% $878 114 $7.72 32% Possible Reserves2 $277 17%
Slide 29: 2012: What's next for STP?
2012: What’s next for STP? • Execution of STP-McKay Thermal Project – Complete construction on time and on budget is the immediate focus – Q4-2012 will be focused on bringing production on line • Maintain STP-Senlac at high levels of production – Phase J (3 SAGD well pairs) starting production in Ja
Slide 30: Contact Information
Contact Information Suite 1700, 205 - 5th Ave. SW Calgary, AB T2P 2V7 Phone: 403-269-5243 Fax: 403-269-5273 Email: info@shpacific.com www.shpacific.com TSX:STP For more information: Byron Lutes, President & CEO Ron Clarke, COO Howard Bolinger, CFO blutes@shpacific.com rclarke@shpacific.com hbolinger
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